Do henchmen suffer death penalties as well,

lowering their effectiveness if they die over and over...and you don't?

I'm pretty sure they do suffer death penalties, or maybe it just looks like they die faster because my character had a death penalty.

Yeah, that's what I mean. It'd be good to know if using them as suicidal martyrs would eventually lose effectiveness..er..if that didn't sound a little crazy. :P

Yes, they suffer the same penalties that players suffer. It becomes really obvious that they suffer from the penalties when, say, the fighter dies off a couple times. After the 2nd or 3rd death, he'll die almost instantly against stuff his level.

If you're interested in watching your henchman party become less effective, go do the Galrath quest with just henchmen. I've done this 3 times with all henchmen. We do well up to the Galrath area, but then the overwhelming number of mobs in the castle area just cause deaths. After a few tries, the party becomes extremely inefficient at killing things. Although I've managed to clear that zone completely with just henchmen, by the time we finished I'm sure my henchmen were mostly at -60% penalties.